EIGHTEENTH CONGRESS OF THE ) ~-;;;·n.

z:-te
REPUBLIC OF THE PHILIPPINES ) .. - · ~· 0c ~rrl'tnrp
First Regular Session )

li.IL -8 P2 :34
SENATE

S.No. _ _ __
268

Introduced by Senator Ralph G. Recto

AN ACT
CONDONING ALL UNPAID AMORTIZATIONS, INTERESTS, PENALTIES OR
SURCHARGES ON LOANS SECURED UNDER THE COMPREHENSIVE AGRARIAN
REFORM PROGRAM AND FOR OTHER PURPOSES

Explanatory Note

Financing the Comprehensive Agrarian Refonn Program (CARP) is one of the major
challenges in implementing land refonn in the country. Apart from meager appropriations for
agrarian refom1 suppmi services, the program also suffers from low repayment rates from
agrarian refonn beneficiaries. The Senate Economic Planning Office (SEPO) estimated that from
1987 to 2004, only P2.5 billion of the projected Pl4.3 billion collectible land amortization
payments was actually collected 1. A Philippine Institute for Development Studies (PIDS) study
revealed that CARP loan collection perfonnance by Land Bank of the Philippines (LBP) as of
March 2015 is about 51.55% for amortization and interest payments 2 .

The cause for the low collection rate is two-fold. On the one hand, an administrative
system to collect loan proceeds from fanner-beneficiaries was not fully established due to its
prohibitive administrative costs 3 . On the other hand, the high cost of agricultural inputs, low
fann outputs, and the onset of devastating meteorological calamities, among others, have left the
agrarian refonn beneficiaries bereft of any means to pay for the loan they have secured under
CARP.

This bill seeks to accomplish several undertakings. First, it seeks to futiher increase the
productivity of agrarian refom1 beneficiaries by providing them additional financial resources
through the condonation of their annual amortization and interests, including penalties or
surcharges, if any. Second, it strives to reduce the administrative cost of implementing the
agrarian refonn program. Ultimately, it endeavors to achieve the original intent of the agrarian
refonn program, which is to improve the lives of fanners, reduce rural poverty and accelerate
rural development. Such intervention is founded on the principles of the agrarian refonn law,
which seek to uphold the welfare of landless fanners and fannworkers with the goal of
promoting social justice, sound rural development and industrialization.

To sustain the gains of the agrarian refonn program, the swift passage of this measure is
eamestly sought.

/mdg

1 ~
Senate Economic Planning Office (2008, July). Broadening and Reinforcing the Benefits of Land form io
City: Senate of the Philippines.
Bcief

2 Ballesteros, M. M., Ancheta, J. And Ramos, T. (2017). The Comprehensive Agrarian Reform Program alter 30 Years: Accomplishments and
Forward Options. Discussion Paper Series No. 2017-34. Quezon City: Philippine Institute for Development Studies
'""Y

' Arlanza, R. S., et. al. (2006 April). The Comprehensive Agrarian Refonn Program: Scenarios and Options lor Future Development. Quezon
City: Depmiment of Agrarian Refonn.

PAGElOFl
 EIGHTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

!II_ -8 P2 :34
SENATE

268
S.No. _ _ __

Introduced by Senator Ralph G. Recto

AN ACT
CONDONING ALL UNPAID AMORTIZATIONS, INTERESTS, PENALTIES OR
SURCHARGES ON LOANS SECURED UNDER THE COMPREHENSIVE AGRARIAN
REFORM PROGRAM AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

1 SECTION 1. Condonation of Unpaid Amortizations, Interest Payments, Penalties or

2 Surcharges. -All unpaid amortizations and interests, including penalties or surcharges, if any,
3 due from loans secured under the Comprehensive Agrarian Refonn Program (CARP) are hereby
4 condoned by the Government, thereby relieving all fanner-beneficiaries from the payment
5 thereof. The agrarian refonn beneficiaries shall be deemed as rightful owners of the lands
6 awarded to them upon the effectivity of this Act.
7 SEC. 2. Implementing Rules and Regulations. - Within thiliy (30) days from the
8 effectivity of this Act, the Depmiment of Agrarian Refonn (DAR), in coordination with the
9 Philippine Agrarian Refonn Council (P ARC) and the Land Bank of the Philippines (LBP), shall
10 promulgate the necessary rules and regulations to effectively implement the provisions of this
11 Act.
12 SEC. 3. Repealing Clause. -Section 26 of Republic Act No. 6657, otherwise lmown as
13 the "Comprehensive Agrarian Reform Law of 1988," as amended by Republic Act No. 9700 is
14 hereby repealed. All laws, decrees, orders, rules and regulations or parts thereof inconsistent with
15 any of the provisions of this Act are hereby repealed, amended or modified accordingly.
16 SEC. 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete
17 publication in the Official Gazette or in at least two (2) newspapers of general circulation.
18 Approved,

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